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Friday, March 13, 2015

Minority Report: PSU banks asked to increase lending to Muslims

THE government has asked public sector
lenders to increase lending to minorities with a view to ensuring
that they get loans in proportion to their population.

It was decided at a meeting called by
minority affairs secretary Arvind Mayaram with bankers.

The percentage share of lending...

to each
minority community in proportion to their respective share in
minority population will go up now.

Muslims constitute the largest
community, followed by Christians. Third largest minority group is
that of the Sikhs.

Besides, the RBI circular also
mentioned Zoroastrians Buddhists and Jains as minority communities.

The issue also came up for discussions
in the meeting chaired by finance minister Arun Jaitley with heads of
public sector banks on Wednesday.

In order to ensure proportionate loans
to minority communities, public sector banks are opening branches in
minority concentration areas, sources said.

From October 1 to December 31, 2014,
PSU banks have opened 238 new branches in minority concentrated
areas, a senior finance official said.

The Centre has indicated that care
should be taken to see that minority communities secure, in a fair
and adequate measure the benefits flowing from various government
sponsored schemes, the RBI master circular said.

All commercial banks, have been advised
to ensure smooth flow of bank credit to minority communities, it
said.

As per the RBI directive, banks have
set up a special cell to ensure smooth flow of credit to minority
communities. The cell is headed by an officer holding the rank of
deputy general manager or assistant general manager (AGM) or any
other similar rank who should function as a 'Nodal Officer'.

Government has identified 121 minority
concentration districts having at least 25 percent minority
population, excluding those States or UTs where minorities are in
majority (J&K, Punjab, Meghalaya, Mizoram, Nagaland and
Lakshadweep).

So, all public sector commercial banks
are required to keep a tab on the credit flow to minorities in these
121 districts, thereby, ensuring that the minority communities
receive a fair and equitable portion of the credit within the overall
target of the priority sector.